Which of the following statements is correct?
A) In the special case of 100-percent-reserve banking,the reserve ratio is 1,the money multiplier is 2,and banks create money.
B) In the special case of 100-percent-reserve banking,the reserve ratio is 1,the money multiplier is 1,and banks do not create money.
C) When the reserve ratio is 0.5,then the money multiplier is 1 and banks do not create money.
D) When the reserve ratio is 0.125,then the money multiplier is 8,and each bank loans $8 for every $1 that it accept in deposits.
Correct Answer:
Verified
Q3: In a system of 100-percent-reserve banking,
A)banks do
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Q201: Table 29-5. Q202: Table 29-3. Q204: Table 29-5. Q206: Table 29-5. Q207: Regulations on the Q208: Table 29-4. Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents
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The First Bank of Johnson City
Bank of Kopeka
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A) maximum amount of reserves
The First Bank of Wahooton
